VITAS CEO: Hospice Leaders Must be Advocates for Industry, Patients

Nick Westfall took the helm of VITAS Healthcare in 2016 after serving for four years as senior vice president of operations. 

VITAS is the largest single-source provider of end-of-life care in the United States. A subsidiary of Chemed Corp., (NYSE: CHE), the company experienced financial and service line growth during the second quarter of 2019, earning net revenue of $313 million, up more than 5% from the Q2 the prior year.

The company’s average daily census rose to 18,681 patients, a 5.9% increase from Q2 2018.Total admissions in the second quarter reached 17,491, up 3.8% from the prior year.


Westfall recently sat down with Hospice News in Chicago to discuss the VITAS growth strategy as well as the challenges and opportunities currently facing the industry, from alternative payment models and clinical staffing shortages to the need for a defined delivery model and reimbursement model for palliative care and the importance of advocacy to the hospice industry.

How would you characterize VITAS overall growth strategy for its hospice business?

At its core, it’s prioritizing mission, patients, families and employees, and recognizing that every single day that there is something that we can do better. That’s built into our mission and values. That starts with ensuring that everybody in the organization knows what their priorities are.


Strategically going forward we are going to continue growing our business organically, like we have been. Organic growth has been our primary growth engine since I took over [as senior vice president of operations] in 2012. 

We also have markets that we would like to be in, and our market entry strategy might be different depending on whether we are able to just enter it or whether we need a certificate of need. We have to consider it that way. And we are also asking: Are there acquisitions opportunities out there? We are looking at that every day.

Acquisitions accelerate our market entry without having to go recruit staff, train them, educate them. Instead, we are acquiring staff and training them quickly on how we like to do things at VITAS in that market.

Our strategy is still built on that combination of core hospice business organic growth, de novo activity would be the next pillar, and then opportunistic acquisitions that are at appropriate multiples. That’s our hospice growth engine. 

We are providing palliative care. There are a lot of palliative care delivery models, and the market is going to determine the speed at which that gets developed. We will respond accordingly. We think we will be an enormous provider in that space with a complementary hospice business with it as well, and we will think about further complementary service lines such as personal care. 

With the nation’s changing demographics and the aging population what are your most significant concerns as you prepare for a potential massive influx of patients? 

Two pieces. The first one is staffing. How do we continue to attract and retain the right staff to care for the “silver tsunami” that everyone discusses. And that’s in our control to a certain extent.

The second piece is we want to influence. We want to be vocal with partners and media and policymakers and other stakeholders, but we are going to have to deal with how the country reacts to that influence — meaning that we may see increasing costs. We may see [U.S. Centers for Medicare & Medicaid Service] policy pieces that address what we’ve been talking about with 10,000 people a day going on Medicare —and we want to be part of the conversation about what that looks like. What does that mean for allowing patients to age in place? Does that allow for a decentralized at-home care delivery model? Do we have to adjust, enhance or modify the [Medicare] hospice benefit? Do we actually land on a definition of palliative care and how personal care gets wrapped around it?

I am excited about the future, but at the same time recognize that it’s not without challenges. So we try to influence and control as much as we can so we don’t just wake up 10 years from now to find that the hospice benefit no longer exists and deal with the negative impact that would have on the patients and families in the marketplace.

There is an ongoing clinician shortage that research indicates will worsen over the next few decades. How is VITAS addressing this?

We are looking for ways to differentiate ourselves from our competitors in the marketplace. And I think there will be a continual uptick of people who want to get into the space, because they’re drawn to it, whether they are just entering health care from a clinical perspective or whether they are tired of the scenario that they now find themselves in and want to move in a new direction.

I want to carry the message from VITAS’ perspective of what we allow and enable clinicians to do and that’s helped us attract people into the organization.  And once they show up, it’s a question of how do we build upon that. How do we retain them? How do we create career ladders and management monitoring to really keep them with us for a very long time? 

We have a lot of people that have been with us for decades. We want to capture what’s going on with these individuals during their experience — before they are hired, while they are being hired or maybe after they left so we can improve every day.

We are doing a lot in terms of our human capital management piece. That is our primary focus so we can continue to improve internally to meet that need. I think any provider that’s not thinking about that in size and scale is going to end up with a very commoditized product, and that’s not VITAS; that’s not what we want to accomplish.

There seems to be some gradual moves towards a value-based payment model for hospice. How might this impact your business?

I believe that is where the future is headed, and that’s where it should be going right. And as we think about how we take a value-based construct and how that gets packaged into the hospice benefit — which I think is already a value based bundle where basically assume the risk on every cost component of it — we have to consider how we take those things and encourage appropriate use of the hospice benefit and earlier identification of a hospice-appropriate patient.

We are finding greater recognition of the value proposition of hospice, but we still need to continue to work to correlate how we want to measure it and the outcomes associated with it, how we inform patients around how and when to access the benefit, and that definition of palliative care. 

What would you say the most significant challenges the hospice industry is facing?

The question of community-based palliative care really needs to be solved in order to care for patients with advanced illness and chronic disease management. How do you care for patients in the last two to three years of life when they have a need, but they are not yet hospice eligible?

We need to define what palliative care looks like and a lot of people want to get into the space, and they want to know how to put together an interdisciplinary team and build those models of care. To me, it’s both a challenge and opportunity. If you are an existing hospice provider today, how are you going to set yourself up with your service delivery models and your partnerships and the markets you are in, with the ability to scale and to be flexible to respond to whatever is going to happen in the market?

I really advocate that hospice leaders from organizations of any size or taxation status need to be prepared for the future and be advocates on the policy side. I encourage them to make sure they are being vocal, whether the issue is value-based care, alternative payment models, demonstration models, the [Medicare Advantage hospice carve-in], advocate and support the trade associations, and engage with CMS and [the Center for Medicare & Medicaid Innovation] and their congressional representation.

Let’s do this the right way to solve a big challenge in the country. Let’s not do something on a whim in an accelerated fashion, with lack of bidirectional communication. Let’s be thoughtful and take the time to sit down and get it right, and I am encouraged because to date CMS and CMMI and others have been open to that. And if we stop being open and available to provide insight that would be a big risk.

What ultimately would you like to see in terms of a payment model for palliative care?

I think where it will inevitably transition is a community-based palliative care delivery model. We have to define the time duration in which we are trying to care for those patients and the purpose and proposed outcome.

The payment mechanism matters, but the delivery mechanism matters just as much, where at the right time we have the right discipline having conversations about advanced care planning and goals of care with the patient and their family to not only document, but to frame out that plan of care for the remainder of their life, and to recognize that their needs and wishes may change. 

We have to consider how we are going to put that into practice and manage that change. That will improve outcomes dramatically, and it probably will not exclusively be driven by physicians and nurse practitioners. There are not enough of them, and to do a community-based approach we need to be mindful of the role of nurses, chaplains, social workers, the teams that make the hospice benefit so effective.

The reimbursement probably will not be a fee-for-service model. It probably won’t be the most efficient reimbursement. If it was I don’t think that the rates could sustain the cost of delivering that. It’s a capitated piece where you are bringing on members who are enrolled, with a per-member, per-month payment and allow the providers to construct their service offerings so it is a sustainable operating model.

Most importantly, that care model and the risk-based approach accompany it, require a complement of hospice identification earlier in the trajectory. If we did that alone it would save a significant amount of money and more than offset the palliative care management piece that doesn’t have a sustainable reimbursement model. I think that is the future.

The devil is in the details as far as the delivery piece. We have to come up with some prescribed purpose to be able to build around. Otherwise the market and the needs of the market are going to be so fragmented that no provider is going to be able to say, “Yes I am going to work with you,” or, “No I am not going to work with you.” It’s all reactive right now. Absent guidance at the federal level I don’t know if that is going to happen.

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